Stock markets ended marginally lower on Thursday, as caution prevailed ahead of expiry of derivatives contracts.

BSE benchmark index Sensex fell 32 points to end at 38,690 while the NSE Nifty settled at 11,676, down 15 points from the previous close.

The markets were dragged lower by a selloff witnessed across banking, financial, auto and energy shares.

Advances in FMCG and metal stocks, however, kept the downside in check.

Top laggards on the 50-scrip Nifty index included Bajaj Finance, IndusInd Bank, Hindustan Petroleum, Maruti Suzuki and Eicher Motors, finishing between 1.6 per cent and 2 per cent lower.Banking stocks declined, with the Nifty Bank finishing 0.4 per cent lower.

Shares in private sector lenders HDFC Bank, Kotak Bank, Axis Bank and Yes Bank, and finance majors HDFC and Indiabulls Housing Finance closed up to 1.2 per cent lower.Investors offloaded their long bets in the futures and options segment instead of carrying them forward to the September series, according to brokers."There is obviously some profit-booking, plus the FO (futures and options) expiry today, all those things might have led to some pause in the overall momentum," news agency Reuters cited Siddhartha Khemka, head of retail research, Motilal Oswal Securities, as saying.Thursday marked the expiry of derivatives contracts for the month of August.Heavyweight FMCG majors ITC and Hindustan Unilever finished the day with gains of 2 per cent and 1.2 per cent respectively, leading the pack of consumer staple stocks.

The Nifty FMCG - the NSE's sectoral index comprising consumer goods stocks - closed 1.3 per cent higher.Brokerage Goldman Sachs began coverage on copper and aluminium producer Vedanta with a 'buy' rating and a target price of Rs 280.

Vedanta shares closed 0.8 per cent higher.

The Nifty Metal settled 0.9 per cent higher.Weakness in the equities came after net sale of equities by foreign institutional investors offset purchases by domestic institutional investors.

On a net basis, domestic institutional investors (DIIs) purchased shares worth Rs 1,114.36 crore on Wednesday while foreign portfolio investors (FPIs) sold shares worth Rs 1,415.87 crore on Wednesday, provisional data from the NSE showed.Lacklustre trade in other Asian peers also influenced trading sentiment in domestic markets. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.3 per cent, with broad gains across the region offset by losses in China.

Stocks surrendered earlier gains with Chinese markets fixed firmly on risks from the China-US trade war and taking little comfort from an apparent easing in business tensions in North America and Europe.(With agency inputs)